HM Revenue and Customs have been creating a suite of “toolkits” which are aimed at helping tax agents man the frontline in terms of tax compliance. Reading between the lines, there is a bit more to this strategy than first meets the eye.

HMRC's toolkits take the form of checklists with explanatory notes and links to online information.

So far the toolkits cover the following taxes:

  • Capital allowances (plant and machinery)
  • Small companies marginal rate relief
  • Capital Gains Tax (land and buildings)
  • Personal and private expenditure
  • Capital Gains Tax for trusts and estates.

It is not compulsory for agents to use the toolkits. However, HMRC not only says that the toolkits will reduce the need for compliance checks,  but also infers that clients will know that you have taken reasonable care on their behalf if you do use them.

So, it can only be a matter of time before there is a box to tick on tax returns. We think that it will say something like this:

Have you or your agent used a toolkit in preparing this return? Yes or no?
If “No” then perhaps you can explain why not?

It does not take much imagination to see that the pressure will be on tax agents to bow to HMRC’s wishes.

Want to reduce tax risk but still save tax?

We are including our own unique and essential Practical Tax Toolkits for FREE if you subscribe to the Practical Tax Database before 31 December 2009. 

Three in one: our Practical Tax Toolkits not only cover the all key tax compliance issues identified by HMRC (they have been written to take into consideration all the risks included in HMRC’s own toolkits) but they also combine to provide you with up-to-date tax saving tips and planning advice. 

We have been developed different kits to use with each type of trading vehicle: self-employed or company.

As you can see we are uploading and testing these to be fully available by December 2009.

Tax Director, Nichola Ross Martin says, "I know am a bit of a tax-nerd but our Practical Tax Toolkits are a pleasure to work with. I have been testing them on my clients over the last three months. Not only will they save you unchargeable research time (do you know how long it will take you to follow all the links on HMRC's versions?) but they also add value to what you do. You can use them as a practice marketing tool. Why not use them to create a tax compliance health check service for your clients too?